To what extent is it permissible for a law firm to provide the following information to
a collection agency:

Name, address, telephone number of the client;

The amount the law firm contends the client owes;

Copies of actual billings that are outstanding;

Copies of the fee agreement and previous correspondence with the client concerning
billings; and

A copy of the entire file to which the account receivable relates.

Statement of Facts

A Texas law firm is considering engaging the services of an independently owned and
operated collection agency to assist the Texas law firm in collecting accounts receivable
due the firm from clients for whom the firm had provided legal services or representation
in legal matters. The law firm would retain ownership of the accounts receivable. The
collection agency would handle collection in accordance with the Fair Debt Collection
Practices Act, as well as the Texas Debt Collection Practices Act. The debt collection
agency would communicate by telephone and letter to the client in the agency's own name
stating that it is representing the law firm in collecting the account receivable.

Discussion

Except as otherwise provided by the Texas Disciplinary Rules of Professional Conduct
(Disciplinary Rules), a lawyer may not reveal a client's or previous client's confidential
information. (Rule 1.05(b)). "Confidential
information" is broadly and specifically defined to include both "privileged
information" and "unprivileged client information." (Rule 1.05(a)). A
lawyer may reveal confidential information to the extent reasonablynecessary
to enforce a claim or establish a defense on behalf of the lawyer in a controversy between
the lawyer and the client. (Rule 1.05(c)(5) (emphasis added); see also Rule
1.05(d)(2)(iv)). Because of the fiduciary relationship involved, any disclosure by the
lawyer should be as protective of the client's interests as possible. (Rule 1.05, Comments
14 and 15 (emphasis added)). Under the Rules, "reasonable" denotes the conduct
of a reasonably prudent and competent lawyer. (Disciplinary Rules, Terminology). A lawyer also may reveal confidential
information when the client consents after consultation. (Rule 1.05(c)(2); see also Rules
1.05(b)(2) and (4)).

Under Rule 1.05, most information concerning a law firm's legal services for a client,
including the amount due from a client for legal services and information on the nature of
these services, will in almost all cases be confidential and part of the information may
also be privileged. (See Texas Professional Ethics Committee Opinion 464, Texas Bar Journal, November 1989).

In Opinion 464, the question was under what circumstances a lawyer could sell outright
his delinquent accounts receivable to a third party factoring company. The committee
concluded that such sale is impermissible unless each client involved had previously given
consent, after consultation with the lawyer, to the disclosure of confidential information
incident to such a sale. The committee recognized that although Rule 1.05(c)(5) permits a
lawyer to disclose confidential information to the extent reasonably necessary in a legal
proceeding that is brought by the lawyer to collect a fee, disclosure of confidential
client information as part of the sale of a delinquent account receivable to a factor is
not necessary for the enforcement of the claim for the lawyer's fee. This Conclusion also
applies in the case of information provided to a collection agency. The employment of a
collection agency and the disclosure of client information to such an agency is not
necessary for the enforcement of the lawyer's claim.

In certain circumstances, an attorney may properly disclose confidential and privileged
information to the attorney's agent who is subject to the direct control of the attorney.
For example, Rule 1.05(c)(3) authorizes an attorney to reveal confidential information to
employees of the lawyer's firm (unless the client instructs otherwise). However, because
of the requirement that an attorney retain control of a client's confidential information,
an attorney may not, in the absence of effective consent by the client, disclose
privileged or confidential information to an agent who is not an employee of the attorney.
Accordingly, an attorney may not turn over to an independent collection agency
confidential client information even though the collection agency would be acting as an
agent of the attorney in the collection process.

Conclusion

A lawyer may not ethically disclose confidential information to a collection agency to
enable the agency to collect the fees which might be due to the lawyer from such lawyer's
client, unless the lawyer complies with the requirements of Opinion 464 and Rule 1.05 of the Texas Disciplinary Rules of Professional
Conduct.